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Context:
After a vampire airdrop, X2Y2 surpassed LooksRare and even Opensea in trading volume, successfully bootstrapped its liquidity by token incentives in the short term.
But there is substantial doubt on its volume as washtrading, where the seller buys back his own NFT at an unreasonably high price just to earn the reward.
Tldr:
After the initial spike on 5/1, when Gas Rebate was replaced by Trading Rewards, X2Y2 organic volume has declined and sustained at a level around 1700-2000 ETH/day, while wash trading dominated 80%-90% of the total volume.
Despite this, over 95% of the #transactions were organic, with 5-10k Daily Transacting Wallets. Wash traders have over 1000x the average trade price compared to that of the organic traders, paying over 300ETH per NFT.
We see a consolidation of wash traders. In April over 4000 wallets were wash traders, now only ~200 as of late June, with each wallet trading 5000 ETH in volume, maintaining the higher level of total volume of the platform.
Using total volume, including washtrading (from @zxsasha), we see X2Y2’s vampire attack in the recent months have been successful, taking over the #1 spot from Looksrare and Opensea in NFT volume.
However, due to its token incentive, where X2Y2 tokens are rewarded to sellers starting 5/1 (detail in the appendix), we suspect that a high % of volume comes from wash trading. But how much?
This analysis, inspired by Dune Wizards such as @hildobby, @zxsasha, and @votan, categorized types of X2Y2 washtrading, and decodes its organic (non wash) volume
There are 2 types of wash trading categorized:
A->B->A, where the seller buys back the sold NFT within 3 days. This accounts for over 80% of the volume.
High day-trading frequency: the same NFT got traded 5+ times in a day. This accounts for 8-15% of the volume.
The wash trading volume started to dominate organic volume in the beginning of April, subsided during mid April and picked back up during mid-May. Now it is ~80-90% of the total volume.
While X2Y2’s total volume soared in May-June, it was solely driven by wash trading. its organic volume stayed flat during that period.
We see a consolidation of wash traders. In April over 4000 wallets were wash traders, now only ~200 as of late June. Most of the wash traders became inactive starting May1. Meanwhile, wash volume / wallet becomes higher for the wash traders who stayed, around 5000 ETH/day in late June.
Why did most Wash traders became inactive on May 1?
The cut by aggregator (chart below) illustrates the behavior.
Before May 1: gas fee was reimbursed and trading fee was 0, 99% of the A→B-A trades were from aggregators like Gem or Genie
May 1-May14: when transaction fee of 0.5% was introduced, most aggregator wash traders (A-B-A) left.
After May 14: the aggregator wash traders came back for the week of May 14, when Buyer reward was also introduced, but then went away.
Meanwhile, wash traders who directly trade on platform spiked up 100x their volume (5k ETH daily per trader), as their X2Y2 token reward is proportional to their wash trade volume.
Methodologies
Wash Trading Labeling Methodology (inspired by Hildobby):
(any of the following would be labeled as Wash)
A-B-A within 3 days (majority of wash trading)
High Frequency of trading (over 2 times/day) the same NFT: example tx
X2Y2 Transaction Methodology:
(inspired by dune_user_generated."x2y2_transcation")
Get all txn from xx table
Map “first layer buyer” and seller based on currency and take and maker
Label true buyer when “first layer buyer” is one of the aggregators like Gem
From evt 721 transfer
X2Y2 platform incentive from ResearchDAO (Listing Rewards → Trading Rewards):
Listing Rewards: 2022/02/15 - 2022/03/31, Using Complex formulas with centralized parameters leads to frequent reward errors.
Gas Rebate for Sales: 2022/04/1 - 2022/04/30, Cancel Listing Rewards, and instead reward based on Gas spent on trading.
Trading Rewards for Sales: 2022/05/1-2022/05/13, Rewards are allocated to sellers based on trading fees.
Trading Rewards for Buyers and Sellers: 2022/05/14 - , Sellers can share 604,902.80 X2Y2 tokens based on trading fees, and the remaining 20,000.00 X2Y2 tokens go to buyers, based on points (AYOR holders can boost points).
Context:
After a vampire airdrop, X2Y2 surpassed LooksRare and even Opensea in trading volume, successfully bootstrapped its liquidity by token incentives in the short term.
But there is substantial doubt on its volume as washtrading, where the seller buys back his own NFT at an unreasonably high price just to earn the reward.
Tldr:
After the initial spike on 5/1, when Gas Rebate was replaced by Trading Rewards, X2Y2 organic volume has declined and sustained at a level around 1700-2000 ETH/day, while wash trading dominated 80%-90% of the total volume.
Despite this, over 95% of the #transactions were organic, with 5-10k Daily Transacting Wallets. Wash traders have over 1000x the average trade price compared to that of the organic traders, paying over 300ETH per NFT.
We see a consolidation of wash traders. In April over 4000 wallets were wash traders, now only ~200 as of late June, with each wallet trading 5000 ETH in volume, maintaining the higher level of total volume of the platform.
Using total volume, including washtrading (from @zxsasha), we see X2Y2’s vampire attack in the recent months have been successful, taking over the #1 spot from Looksrare and Opensea in NFT volume.
However, due to its token incentive, where X2Y2 tokens are rewarded to sellers starting 5/1 (detail in the appendix), we suspect that a high % of volume comes from wash trading. But how much?
This analysis, inspired by Dune Wizards such as @hildobby, @zxsasha, and @votan, categorized types of X2Y2 washtrading, and decodes its organic (non wash) volume
There are 2 types of wash trading categorized:
A->B->A, where the seller buys back the sold NFT within 3 days. This accounts for over 80% of the volume.
High day-trading frequency: the same NFT got traded 5+ times in a day. This accounts for 8-15% of the volume.
The wash trading volume started to dominate organic volume in the beginning of April, subsided during mid April and picked back up during mid-May. Now it is ~80-90% of the total volume.
While X2Y2’s total volume soared in May-June, it was solely driven by wash trading. its organic volume stayed flat during that period.
We see a consolidation of wash traders. In April over 4000 wallets were wash traders, now only ~200 as of late June. Most of the wash traders became inactive starting May1. Meanwhile, wash volume / wallet becomes higher for the wash traders who stayed, around 5000 ETH/day in late June.
Why did most Wash traders became inactive on May 1?
The cut by aggregator (chart below) illustrates the behavior.
Before May 1: gas fee was reimbursed and trading fee was 0, 99% of the A→B-A trades were from aggregators like Gem or Genie
May 1-May14: when transaction fee of 0.5% was introduced, most aggregator wash traders (A-B-A) left.
After May 14: the aggregator wash traders came back for the week of May 14, when Buyer reward was also introduced, but then went away.
Meanwhile, wash traders who directly trade on platform spiked up 100x their volume (5k ETH daily per trader), as their X2Y2 token reward is proportional to their wash trade volume.
Methodologies
Wash Trading Labeling Methodology (inspired by Hildobby):
(any of the following would be labeled as Wash)
A-B-A within 3 days (majority of wash trading)
High Frequency of trading (over 2 times/day) the same NFT: example tx
X2Y2 Transaction Methodology:
(inspired by dune_user_generated."x2y2_transcation")
Get all txn from xx table
Map “first layer buyer” and seller based on currency and take and maker
Label true buyer when “first layer buyer” is one of the aggregators like Gem
From evt 721 transfer
X2Y2 platform incentive from ResearchDAO (Listing Rewards → Trading Rewards):
Listing Rewards: 2022/02/15 - 2022/03/31, Using Complex formulas with centralized parameters leads to frequent reward errors.
Gas Rebate for Sales: 2022/04/1 - 2022/04/30, Cancel Listing Rewards, and instead reward based on Gas spent on trading.
Trading Rewards for Sales: 2022/05/1-2022/05/13, Rewards are allocated to sellers based on trading fees.
Trading Rewards for Buyers and Sellers: 2022/05/14 - , Sellers can share 604,902.80 X2Y2 tokens based on trading fees, and the remaining 20,000.00 X2Y2 tokens go to buyers, based on points (AYOR holders can boost points).
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